Power Supply: Situating Buhari’s Lamentation

Energy

With time fast running out on the Muhammadu Buhari administration, Nigeria has a chance to remove all the bottlenecks in the electricity supply industry this year, Emmanuel Addeh writes

The Nigerian power sector is so problematic that a former Minister of Power, Zainab Kuchi, was once quoted as telling a South African

delegation that evil spirits were preventing the country from achieving sustainable electricity supply.

At the time, whether literally or figuratively, Kuchi recommended that all hands must be on deck to collectively exorcise the demons in the sector. “We must resolve to jointly exorcise the evil spirit behind this darkness,” she said.

But that was almost a decade ago. Time has passed, billions of dollars have gone down the drain, presidents and ministers have come and gone,promises have been made and broken. Yet in Nigeria, one thing has remained as clear as daylight: darkness.

The problems are already well known: gas shortages, unsustainable non-market driven tariffs, weak transmission and distribution infrastructure, value chain misalignment, among several others.

To be fair, some steps have been taken in the past to catapult the country to an electricity sufficient one, but the more things change, the more they remain the same, it would seem.

These efforts in the past culminated in the “privatisation” of the sector in 2013, but yet in an irony of sorts, the government still controls, to a large extent many critical levers of the sector, including tariffs.

All it needs to do every time it wants to wield its powers is to simply leverage on its 60 per cent ownership of the Generation Companies (Gencos), its 40 per cent equity in the Distribution Companies (Discos) and 100 per cent ownership of the Transmission Company of Nigeria (TCN).

At the last count, the Central Bank of Nigeria (CBN) has spent nearly N1.5 trillion in its intermittent interventions in the industry under the current administration. Yet, that amount is meagre compared to the humongous sums spent by previous administrations. But the results just won’t come.

Passing the Buck

Nigeria’s almost seemingly insurmountable electricity problem did not start under Buhari.

However, almost seven years into his government, the president still regales Nigerians with how when crude oil sold for $100, his predecessors failed to do anything about the power challenge. Well, under the current government, the commodity has sold for over $85. Indeed, the president took the blame game a notch higher last

Wednesday during an interview when he, without mentioning names, said the major problem with the sector was foundational.

Again, he took a swipe at the administration before his, accusing it of mortgaging the sector by selling off the country’s power assets to its cronies who neither had the financial muscles nor the technical know-how to revamp the sector.

According to him, Nigerians are facing epileptic power supply because those who bought the various electricity distribution companies got them based on political favouritism and geopolitical consideration rather than on merit.

He argued that those who bought the Discos were not electrical engineers nor did they have the financial muscle, and thus, could not understand the intricacies of the power system in the country.

“The owners of Discos bought them based on geopolitical zones rather than merit. The people that own them, who are they? They are not electrical engineers, they don’t have money, it is just a political favour.

“To remove a system and reintroduce one is no joke. Luckily, we have the TCN and that is the transmission. If we can get our technology right, we will cut the cost on transmission and the likelihood of sabotaging the lines and so on,” he maintained.

Perhaps, the president was right. After all, Yola Disco was returned to the government after years of non-performance and recently Abuja Disco was handed over to new owners for its inability to meet its obligations to its creditors.

But Buhari has also had close to seven years to fix whatever he thought was wrong with the privatisation exercise which took place before he assumed office.

President Should Act, Not Lament

But a group, the All Electricity Consumers Protection Forum (AECPF) feels that the president’s displeasure, rather than lead to lamentation, should spur him to action.

For instance, the group advised the president to scrap Nigerian Electricity Regulatory Commission (NERC), and move its responsibilities to the Federal Competition and Consumer Protection Commission (FCCPC) National Coordinator of the group, Adeola Samuel-Ilori, said that the buck stops at the table of the president who should demonstrate sufficient political will to rejig the sector in the national interest.

“Our advice to the president is to scrap NERC for not living up to its responsibilities of regulating the industry.

“The government should put the sector under the supervision of the FCCPC which had in recent times shown that it had what required to protect the interest of Nigerians.

“If we have a regulator that cannot only bark but can bite, all the stakeholders in the electricity value-chain, especially the Discos, will sit up,” the group argued.

According to him, for several years, the Discos have ignored NERC’s directives without sanctions, which tend to encourage impunity in the sector.

NERC’s order on capping of estimated billing, for instance, has also been obeyed in the breach by some Discos without sanctions, compelling the group to approach the court for reprieve.

In addition, he listed the constant flouting of the Meter Assets Providers (MAP) scheme which stipulates 10 days for customers to be metered after making payment, as another regulation that is routinely flouted by the power distributors.

He was right. Indeed, a third point would be the non-implementation of one of the guidelines in the recent service-based tariff regime, which mandates the Discos to downgrade customers’ tariff band if the Discos fail to supply a certain number of hours of electricity. Over a year later, the rule has never been executed.

Time Running out But…

With roughly 4,500MW for Nigeria’s 200,000 million people, it’s obvious that solving the power supply quagmire in the country has rarely been scratched. What makes it even worse is that getting anything thing done under the present government in less than 17 months, looks like a tall order.

The argument is that if virtually zero improvements have been achieved in about seven years, the chances of having a last-minute miracle may be a pipe dream.

While completing power generation plants before the exit date may still be possible, the methodical execution of the Siemens deal remains a viable pathway to improving the country’s supply remarkably in the short term.

With the noise that heralded the signing of the deal with Siemens AG of Germany in 2020, it was expected that some low hanging fruits would immediately be harvested. However, enthusiasm for the project appears to have long waned.

In brief, the agreement seeks to remove the bottlenecks hindering the inability of the country to take the possible 13,000MW available in the country to customers’ homes within months. The current transmission is roughly 4500MW.

Aside from the upgrading of 105 power substations and the construction of 70 new ones, under the deal about 3,765 distribution transformers will be installed and 5,109 km distribution lines will be built thereby boosting supply.

With timelines already missed, in phase one, 7GW was expected to be achieved between when the deal was signed and the end of 2021, with the upgrading of transmission and distribution of the TCN and Discos, expected to contribute an additional 2gw.

For phase two, the government said that 11gw will be achieved between 2021-2023, with full use of existing generation and last-mile distribution capacity, while phase three will see the achievement of 25gw between 2023-2025 with appropriate upgrades and expansion in generation, transmission and distribution.

The deal also involves Siemens’ support for the regulator, the NERC, towards improving metering in the electricity industry in the country.

The programme, touted to be a game-changer, has not seen any practical work since it was contracted, raising concerns about whether like the rest, it has gone with the wind.

Government Raises Hope

Although nothing appears to have been done, the government has said that the scheme is on track, dismissing insinuations that the deal had failed.

Speaking recently, Minister of Power, Abubakar Aliyu, who spoke at a workshop organised by the Power Correspondents Association of Nigeria (PCAN), in Abuja, noted that the project remains fully on course.

Aliyu, who was represented by the Minister of State, Power, Mr. Goddy Jedy-Agba, stressed that the project has the capacity to expand Nigeria’s electricity supply system.

He reiterated that the initiative would improve access to affordable, efficient and reliable electricity and provide support for industrial and economic growth in the country.

The minister also explained that the government was currently evaluating the procurement process and was confident that a positive outcome will emerge, saying that the project had reached an advanced stage of activities in line with the Siemens project implementation plan.

However, he argued that sustainable growth in the power sector can only be achieved by adding renewable sources to the energy mix, noting that today, 80 per cent of Nigeria’s energy comes from gas-fired plants.

What Legacy?

The Buhari administration took over the government with high hopes that within a short time, Nigerians will begin to see changes in every area of their lives, reliable power supply not excluded.

But close to seven years after he took the mantle of leadership, that hope appears to be forlorn.

What legacy will the president leave behind? More light or more darkness than he met in 2015?